Review of FCA Final Notice on Metro Bank plc

On 12^th of November 2024 the FCA imposed a £16.7 million fine on Metro Bank Plc for serious shortcomings in its anti-money laundering (AML) controls between June 2016 and December 2020. According to the final notice, Metro Bank’s Automated Transaction Monitoring System (ATMS) failed to effectively monitor over 60 million transactions, amounting to £51 billion.

The FCA identified a critical flaw in the ATMS data feed, which excluded certain transactions from monitoring. This error, which affected transactions conducted on the day an account was opened as well as subsequent transactions until account records were updated, persisted for years. Despite discovering the issue in April 2019, Metro Bank did not fully resolve it until December 2020, exposing its systems to potential misuse for financial crime. Therefore, Metro Bank Plc was deemed to have inadequate reconciliation attempts and was not seen to rectify or notice the errors in a timely manner.

In its findings, the FCA also noted deficiencies in Metro Bank’s governance and oversight processes. Junior staff identified bad data and attempted to escalate the issue to more senior staff. One major oversight was pushing back the problem when it was raised to Metros Financial Crime Steering Group, responsible for financial crime issues. The incident was first raised to be reviewed in January 2018, however it was not discussed again until April 2019 when another error was identified. The firm’s failure to promptly address these weaknesses resulted in a prolonged period of non-compliance with AML regulations. A review of the unmonitored transactions later prompted Metro Bank to take remedial action and submit 153 suspicious activity reports and close 43 customer accounts. The FCA’s enforcement action against Metro Bank highlights the importance of maintaining robust AML systems and effective oversight mechanisms. This case underscores the need for financial institutions to develop resilient frameworks capable of addressing both technical and governance-related vulnerabilities. The financial sector is reminded of its crucial role in preventing and detecting financial crime, as lapses in AML compliance can expose firms to significant regulatory risks. Thus, it is important that all transactions are properly monitored, and the controls set in place by a firm and are continuously monitored.

At Objectivus, we understand the complexities in the identification and management of financial crime risks and the importance of robust controls to mitigate such risks. Our expertise lies in helping firms build and maintain compliance and financial crime frameworks that meet regulatory expectations, support operational practices and ensure the highest standards of governance. Whether it involves enhancing AML controls or addressing broader financial crime challenges, we work closely with our clients to navigate regulatory demands and ensure long-term success.

If you need support or have any questions about AML or other compliance related issues, feel free to contact us at info@objectivus.com.

For further guidance or to discuss how these changes affect your firm, please contact Bhavisha Patel at bp@objectivus.com or Robert Hudson at rfh@objectivus.com or call Objectivus at +44 (0)2034 573 283